Uneven floors: targeting categorical transfers for poverty and inequality reductions

This working paper is part of a TaxDev research project that explores informal taxes and transfers, this paper examines social protection's role in 'ending poverty in all its forms everywhere', in the words of the Sustainable Development Goal 1 (SDG1). 

Key messages: 

• The Sustainable Development Goals commitment to raise social protection coverage is framed, in the short to medium term, in terms of poverty reduction and ‘leave no one behind’ principles.
• The commitment to social protection floors for children, older people and people with disabilities is weakly focused on short-term poverty reduction and on prioritising the most disadvantaged and, in some countries, can present a fiscal challenge to implement in the short term.
• The analysis in this paper sets out approaches to introduce elements of targeting of social floors to improve poverty reduction in the short term and allow the expansion of coverage to fewer poor people over time, supporting the progressive realisation of social protection floors.
• Examples of such targeting are to focus on the older populations and on those living with severe disabilities, on children in lone-parent households and others who can be shown to be more disadvantaged than children or older people in general. Targeting using these approaches does not involve any test of income or wealth.
• The costs of targeting cash transfers to sub-groups of children and older people and on people with severe disabilities are considerably lower than current estimates of immediately introducing full social protection floors and display higher cost effectiveness.